Through its maiden public offering, the Chennai-based Polaris offered 43,65,650 shares at a premium of Rs 200. While 8,53,150 shares are offers for sale in the present offer, the balance is the new equity being issued by the company. The shares are to be listed on the stock exchanges at Mumbai and Chennai. At a price-earning ratio of 20.35 from its fiscal 1999 earnings per share of Rs 10.81, the Poalris IPO was priced on the higher side.

According to sources, while the retail investors' part was oversubscribed by around six times, the bulk investors' part was oversubscribed by around 20 times. The total collection from the IPO at the current moment stands in excess of Rs 1000 crore. Birla Global Finance, HDFC Bank and Kotak Mahindra Capital were the three institutions who have financed the Polaris issue. According to merchant banking sources, the company received around 50,000 retail applications on the last day of the issue.

The issue, lead managed by Kotak Mahindra Capital and Enam Financial Consultants, was fully underwritten (except the portion reserved for the Polaris employees). Kotak mihindra Capital, Enam Financial, Enam Securities and Corporation Bank were some of the underwriters to the issue.

The main object of the present issue is to set up three new offshore software development centres - one in Noida near Delhi and two in south India, two global software development centres - one in the US and the other in Europe, and payment of longterm loans. While the total project cost is estimated at Rs 73.76 crore, Rs 73.76 crore is being financed through the current issue and the balance Rs 3.70 crore through the internal accrual route.

Between fiscal 1997 and 1999, the total revenues and the net profit of the company has grown at a compounded annual growth rate of 99 per cent and 105 per cent. During fiscal 1999, from a total income of Rs 60.54 crore, Polaris had earned a net profit of Rs 14.64 crore. For the current fiscal, the company projects a net profit of Rs 25.28 crore from a total income of Rs 116.50 crore.

Copyright © 1999 Indian Express Newspapers (Bombay) Ltd.